Comments on: Maintaining Your Castle

By: advantage mortage

advantage mortage — Tue, 29 Sep 2009 20:10:22 +0000

advantage mortage…

Your topic “I Told You So” — In Advance | Real Estate Investing – The Truth was interesting when I found it on Tuesday searching for advantage mortage…

By: Liz and Will in Cobourg

Liz and Will in Cobourg — Tue, 21 Apr 2009 18:41:20 +0000

Hi Gail!
Was perusing your blog today, and noticed this post happened to fall on the same day as your visit to our house….Coincidence?
Our eyes are opening, thanks to you. Our priorities are shifting, and we’re realizing that putting off things that need to be done in favor of things that we want to do isn’t helping us at all in the long run!
See you tomorrow
Liz and Will.

By: Melaniesd

Melaniesd — Fri, 17 Apr 2009 00:26:47 +0000

Wow! lots of food for thought.
I’ve been saving $25 biweekly towards cosmetic things I’ve wanted to do to my home. New paint, new hardware etc. It doesn’t take long to add up and it feels good to have that fund.
I like the idea of making a list of things we know will need to be done and an estimated time frame to save for them.

I’m greatful to have a handy dad & FIL, not to mention an uncle who is an electrician!

Today my father came over to help me check my gutters. They haven’t been draining properly and I figured something was stuck in the downspout. It turned out to be a piece of wood and a tennis ball blocking the down spout. I was very relieved that I don’t have to replace the gutter system.

By: an ostrich named sam

an ostrich named sam — Thu, 16 Apr 2009 09:11:43 +0000

I’m renewing my mortgage and renovating my little castle. I’m having the the attic insulation removed and replaced ( estimated cost 7,000 as the insulation contains asbestos) and the exterior completely redone, all new windows, siding insulation and front and back door, estimated cost 18,000. Plus the bathroom will have to be done sooner than later, so while the windows are out, a new bathtub will find a home in my DD’s bedroom as part of her bedroom will become the expanded bathroom.

I’ve increased my debt load once more, but the work that I’m doing now will only increase the value of my home and make it easier for resale.

As I inch/claw my way to becoming debt free( minus my mortgage)I’ve opened my saving/emergency accounts and enjoy watching them build. I know that with in the next 2-3 years the furnace will have to be replaced, so I’ll need to have saved 10,000 for its replacement ( I’ll be switching to a heat pump and need to have the electrical panel upgraded from a 110 to a 220).

I was happy to read this post and enjoyed all the comments.

By: Stephanie H.

Stephanie H. — Thu, 16 Apr 2009 03:40:13 +0000

I am an architect and the big reality is that where you live can have a big impact on how much repairs/maintenance will run you. It isn’t even a country living vs city living thing. It is supply vs demand. In general it is the labor that will influence the cost. Is there and abundance or a shortage of qualified contractors in your area for the trades in question? Are you going to need a general contractor or can you do it yourself? Do you need to have the work done this second or can you wait and get multiple quotes? To have a contractor at you house tomorrow will usually cost you more money than if you can wait for the tradesman/contractor to fit into your schedule. I think it is an excellent idea to make a list of the repairs that will need to be made in the short term and long term (these are generally more costly). When you make this list you need to decide if you will be replacing/fixing in kind or making upgrades. As someone else may have mentioned….just because work has recently been done doesn’t mean you won’t have to work on it soon either, cheap or shoddy work will necessitate maintenance sooner than you may think. To a certain degree you get what you pay for. When getting quotes you will usually pay for taking the lowest quote. The middle of the road quote is usually your best bet unless you have previously worked with the contractor/tradesman. As Gail mentioned a good home inspector is worth their weight in gold. Mine predicted the issues with my electrical panel so I set money aside for when the work was required. Recently the cost to have work done has gone down in my area as there are very few houses being built. I’m not sure about Canadian homeowners insurance but on mine the “replacement value” is something you can adjust based on neighborhood, construction and materials. Also I increase the amount allowed for code upgrades. My house is 60 years old and if I had to fix anything that touch my electrical system for instance my local building department could require that my entire 60 year old electrical system be brought up to date. Remember you will also need to pay a deductible up front depending on what happened to your home.

Just a thought for geographygeek…. you will want to have a minimum of 10% and preferrably 15% in contingency for any renovation. Use the time while you are saving to plan and price every last detail. When you think you are close to having enough money start pricing out the project for any work you won’t be doing as you may be suprised at the actual cost and find you will need to save more money than you thought. Good Luck!

By: geographygeek

geographygeek — Wed, 15 Apr 2009 19:15:00 +0000

Thanks Gail for this timely post! We are planning what renos to tackle and are making sure to have a healthy account before we start!

By: Maureen

Maureen — Wed, 15 Apr 2009 16:59:22 +0000

Hi ComputerHero

“Nothing ever goes to plan, but not having a plan is worse than not having one that doesn’t quite work out.”

So very, very true. Before we became reformed characters, thanks to Gail, we never had a plan. Lived re-actively in all aspects of our lives.

When we first moved to the Yukon the RCMP had signs up everywhere to warn people about the dangers of traveling in the winter when the temperatures can get to 40 below. Their motto for this campaign was: IF YOU FAIL TO PLAN, YOU PLAN TO FAIL. Turns out to be one of those irritating truisms.

At least when we broke down half way to Dawson we had a plan that didn’t quite work out. Had sleeping bags and a dog for warmth and lots of chocolate bars but no satellite phone. A long cold dark lesson.

I redid the budget and we can only put 1% aside until I get more work but that is a start and just making a start and a change – no matter how small – is very calming and empowering.

By: ComputerHero

ComputerHero — Wed, 15 Apr 2009 15:33:40 +0000

I think $400-500/month is a reasonable and safe number. Throw it into High interest savings account or TFSA and you’ll be fine. TFSA was really meant for this sort of thing, not so much as a retirement veichle. Once you hit 30-40k you should be fine. This isn’t alot of money to save, alot of this is money you’re spending anyway but probablly aren’t budgeting for, new rakes, new hoses, new lawnmowers, new furtniture, a repair to the fridge or tv, all that falls in here. The goal is not to be caught off gaurd (or in debt) with a 20k roof redo, and keep in mind, this shouldn’t be a big stress. Gail is just trying to get us thinking about these things and help us be prepared. Do what you can afford, if you can do more than 500/month and you think you need it, great, if you can only afford $100, great.

Nothing ever goes to plan, but not having a plan is worse than not having one that doesn’t quite work out.

By: Gail

Gail — Tue, 14 Apr 2009 23:33:32 +0000

Hello y’all… good to see you biting in. Okay, the 3-5% is usually the value of the house and it includes everything you’ll do to your home, including replacing things like appliances. I’m not suggesting you’ll spend that much every year, but that you save that much each year until you have a very healthy home maintenance fund established. If you have to replace your roof and a furnace in a single year, that’d set you back ten grand… that’s a lot of money to come up with all at once if you haven’t been setting some aside each year. And while it’s great to debate the “nice to haves” over the “must haves”, the fact is that if you want your home to keep pace with comparables in your area, it’ll mean more than taking care of the “maintenance” issues. You’ll have to do upgrades, replace flooring, windows, appliances, and the like. For homes where land values have escalated dramatically, it’s fine to use the insurance replacement value as the benchmark. But don’t use the original purchase price since the cost of materials and labour keep going up. When I moved into my last house, we paid $350,000 for the place. We lived in it for 5 years and had to replace a bathroom (old and ugly $8,000) and a roof ($18,000). We also painted the place, replaced appliances and redid the kitchen. Some of this was choice (the counters needed to be done, we chose to use granite in the kitchen). Some was necessity … ten year old kitchen appliances, Never mind re-graveling the drive-way, If we hadn’t been going with the 3% rule (newer home), the place would not be in ship shape for resale, which is where we found ourselves.

By: RMWaterloo

RMWaterloo — Tue, 14 Apr 2009 20:47:25 +0000

One thing is that you can do it to the value of the building…IIRC, it only depreciates while the value of the land is what is going up in value when a house price rises.

By: Maureen

Maureen — Tue, 14 Apr 2009 20:35:36 +0000

Hi Danny and Geoff and Marie

Yes it should be easy and common sensical but as usual I can turn a molehill into the Himalayas. I think the thin air up here is making me light headed and silly. er.

As of January 1st 2009 our house has been valued at $108,000 by the city, $195,000 by the insurance company and $260,000 by the Realtor. I haven’t got a clue what the evaluations by these 3 would have been in 1999 and don’t even want to go there because I am quite capable of driving myself insane just with this years figures. Sadly we could probably have all the work done this year at 1999 labour costs because so many Trades up here are unemployed or underemployed that it is bargain hunting season. But that is a moot point since we only have $375 in the House R&M fund and all the Trades we know are friends so we couldn’t rip them off. Well, maybe just a little. Say, at 2001 prices?

My confusion lies in which of these amounts is the value of my house. On what do I base my 3%? I know that this is all just an estimators game but I really want to be on the winning team for once in our financial life.

I am feeling like I am in the middle of the tale of Goldilocks and the Three Evaluators. I really like Geoff’s idea of just choosing an amount but what amount? I don’t want it to be too little or too much but JUST right.

Soooooo – having had time to read the posts and think a bit, and do the math (as per Marie) I have come up with a solution using all the facts and information over load that is confusing me. If 3% of $108,000 is $3240 per year and 3% of $195,000 is $5850 per year and 3% of $260,000 is $7800 per year then the average is $5630 per year or $469.16 per month. If I take this as my chosen amount then I will be able to sleep tonight. I won’t be able to afford it but I will have a practical answer and can just start juggling the books. Or sell the house. Which ever takes less work.

By: Everything Is In/Flux · Bookmarks for April 10th through April 14th

Everything Is In/Flux · Bookmarks for April 10th through April 14th — Tue, 14 Apr 2009 19:02:20 +0000

[...] Maintaining Your Castle « gailvazoxlade.com – [...]

By: Danny Jellis

Danny Jellis — Tue, 14 Apr 2009 18:28:09 +0000

When you calculate the percentage for home maintenance, its simple, will you be paying for labour and supplies at today’s prices, or at prices when you bought the house. Say you bought the house for $100,000.00 ten years ago. Is the electrician going to bill you at 1999 prices or 2009 prices?
Seems like common sense to me.

By: Marie

Marie — Tue, 14 Apr 2009 17:33:26 +0000

I forgot to say:
Is the cost of fixing a home the same as in the country or should it be based on home value?
If you use ‘my favorite approach’ explained above, the question will not matter. Offer and demand, labour availability, parts availability in the country… Do the math for YOUR area and update your numbers every few years. The standards of maintenance may vary as well by area and you will know when you try to sell. Some average size houses in the country cost more than some in town because of the land area…
Which one costs more? Price it out!

By: Marie

Marie — Tue, 14 Apr 2009 17:02:08 +0000

Good question % of original price or current value?
Let’s face it, if you keep your house for more than five years, the cost or repairing stuff went up! If someone has the AVERAGE value of increase of homes over 20 or more years (ANYONE HAS THE #?), then use your initial amount and increase it every year by this average increase in home value. No matter what, you might be off because the cost of materials could be up or labour could be hard to find. The prices of fixing goes up your might increase the square footage of your house or you got a fixer upper with a small mortage and a lot of sweat equity.

My favorite approach: Do the math! Repeat every 5 years or so. Get the life expentancy for each feature in your house, get the updated cost of replacing and crunch the numbers the way Gail did.
Roof, appliances, furniture, carpet, windows, doors, pool, foundation, flooding risks, plumbing…